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Xiaomi sells 1 million phones in 18 days in India while business tanks at home

Xiaomi's sizzling year in India shows the company's intentions in the country but it needs to watch its rearview mirror for competitors such as Huawei and Oppo, the chief culprits behind its sales slump at home in China.

Xiaomi has always been the king of internet sales in the past few years in India, with tens of thousands of its phones impressively vanishing from online retailer inventories in mere seconds.

Recently, however, it outdid all its previous sales efforts in the country by selling an unbelievable 1 million phones in just 18 days as part of its Diwali sales effort, the whole extravaganza fueled in part by the allure of snagging one of them for 1 rupee. Half of those sales came in just three days at the beginning of the month. No other phone company has managed this feat to date.

The fact that Indians dig Xiaomi is no surprise but what is becoming increasingly clearer now is that the Chinese company seems ready to dispense with its gradualist approach in India and mount a full-fledged assault.

"India is an extremely important market in Xiaomi's globalization strategy. It has become our largest market outside of mainland China," CEO Lei Jun wrote in a letter to shareholders.

Consequently, Xiaomi has swiftly climbed to the number three position for online smartphone sales with 12.9 percent market share in the April-June period.

All of Xiaomi's products are highly sought after in India -- from the Redmi Note 3, Mi 5, Redmi 3S Prime, and Mi Max -- because of their stylish designs and features offered at standout price points, far cheaper than anything its competitors' comparable products and therefore an exceptional value.

CHINA TANKING

There is a very good reason why Xiaomi has stepped on the gas in India and it has to do with how quickly its fortunes have plummeted in its home country. From being the cock of the walk in China where it was the largest phone seller there for two straight years (2014, 2015), its shipments slumped by 38 percent, from 10.5 million to 17.1 million, pushing it to a lowly fourth position, according to research firm IDC.

This is not just because of a saturating market but also because local outfits such as Huawei and Oppo are finally taking the fight to Xiaomi and able to wrest customers away from it.

India on the other hand is both booming and proving to be an El Dorado for Xiaomi. According to market research firm Canalys, not only is the Indian smartphone market skyrocketing at a 20 percent clip (as of Q3 2016) and has reached 290 million customers, it is very undersaturated at around a measly 30 percent.

In the dog-eat-dog world of selling what is largely a commodity, Lenovo (which owns Moto G) has dethroned longtime domestic champ and holder of the number 2 spot, Micromax, while Xiaomi has elbowed aside other Indian stalwarts Intex and Lava. Moreover, while Xiaomi has slumped 38 percent at home, it is bounding along at an impressive 170 percent in India. It has even started selling its newly configured air purifiers for 9,999 rupees as part of its Internet of Things consumer appliance strategy, a device that an intensely polluted India -- like its neighbor China -- needs desperately.

One reason for Xiaomi's success is thanks to the ditching of its exclusive online sales channel strategy and farming out its wares to the big three, namely Amazon India, Flipkart, and Snapdeal. Another is because it is finally embracing brick-and-mortar stores which is the key to making it big in the hinterland and small towns where most of India lives.

Still, as Xiaomi looks to continue its campaign in India it will face the same brutal competition from its brethren such as Huawei, Oppo, and Vivo as it does in its homeland, all of whom make similar, high-quality, affordable products that Xiaomi has become known for.

Which means that as the smartphone selling game in India heats up over the next few years, Xiaomi may need to come up a much more differentiated, strategic and product game plan in order to continue to make a success of India, else suffer the same fate that it currently endures in its own country.

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